Design Thinking Approach Implemented by Airbnb: A Detailed Analysis

This report examines Airbnb's application of design thinking principles to address business challenges and enhance customer experience. The analysis begins by outlining the rationale for choosing Airbnb as a case study, highlighting its early struggles and subsequent adoption of design thinking. The report then delves into the service design-thinking model, detailing its phases of exploration, creation, reflection, and implementation, using the company's experience with poor-quality photos as a pivotal example. Relevant design thinking principles, such as the 'wishlist' feature, are discussed to illustrate how Airbnb caters to customer needs and drives revenue. The report also addresses business challenges faced by Airbnb, particularly those related to revenue generation, and how design thinking was employed to overcome them. The conclusion emphasizes the impact of design thinking on Airbnb's success and its relevance in the competitive global market.

Running head: - DESIGN THINKING APPROACH IN AIRBNB
DESIGN THINKING APPROACH IN AIRBNB
Name of the Student
Name of the University
Author Note

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Table of Contents
1. Rationale for the Choice:.......................................................................................................2
2. Design Thinking Approach in Airbnb:..................................................................................2
3. Relevant design thinking principles:......................................................................................4
4. Business challenges and Design Thinking:............................................................................5
5. References:.............................................................................................................................6

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1. Rationale for the Choice:
Airbnb stands for airbed and breakfast is a company that is specifically an online
marketplace as well as a community that deals with various rentals and carries out the
functionality of connecting people (Kavousi, Miller and Alexander 2019). The rentals are of
accommodation places and is open to all the people who do not have a place to stay and are
looking for some accommodation on rent.
In the year of 2009, the company was visibly identified to be having loss in the
business and generating a revenue of $200 per week that was quite less in regards to the
standard of the company. With no prior indications to what was going bad, the company
slowly and steadily realised the fact that the pictures they had placed on their online portal
was not up to the mark and was no more attracting newer customers to look for
accommodations through their online portal (Stickdorn et al. 2018). In regards to this, the
company applied a design thinking approach and brought their business back on track with a
revenue generation of $400 per week. Hence, this company has been chosen to analysis and
asses their usage of design thinking and the relative strategies to put up to the competitive
global market.
2. Design Thinking Approach in Airbnb:
The service design-thinking model has the primary involvement of multiple
disciplines that stars from emphasizing the phases to the final delivery of the particular
product to the consumers. However, the particular achieving of a desired design extends the
experience towards the borders in regards to the product development for the inclusion of
service design (Brown and Katz 2019). Unlike the physically existing design of the product,
the service design has a complete focus upon the communication that is carried out between
the consumers and that of the organization during the process of selling or buying physically

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existing services or might as well as be products. This particular design model for design
thinking approach has the containment of four primary steps, which are,
i) Exploration- this is the research that shall be carried out for the design thinking
approach.
ii) Creation- creating the approach to be implemented for betterment of services
provisioned to the consumers.
iii) Reflection- is the stage that can also be termed as the prototype that has been
created particularly for the design thinking and the relative approaches.
iv) Implementation- is the particular and the final stage when the thinking approach
or the service design that has been created is implemented into the organizational
procedure.
One of the primary scenarios that had taken place within the company named Airbnb
was in the year of 2009 when the sales or revenue generation of the company was suffering a
downfall. In regards to this problem, the company eventually had identified that it was all
because of the poor quality of the pictures that led to such a loss and distraction of the
customers from the services of the company (Huq and Gilbert 2017). As a reason, Airbnb
team had travelled to New York for clicking better and high quality pictures of the rental
apartments and placed them on their website. This led to a potential increase of the sales and
the income increased by a count of 100% in no time.
Hence, in regards to the steps of service design-thinking model, the company firstly
researched the lying problem of decreased sales, created the plan of replacing the poor quality
pictures, clicked better pictures of the rental apartments and finally, replaced the bad pictures
on the website by them.

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3. Relevant design thinking principles:
Airbnb provisions a great service to all of its customers who have decided to travel to
a place of their choice. For a design thinking approach and implementing the service design-
thinking model, the company tries to read the mind of the traveller and the relevant place that
each individual wants to make a visit (Elsbach and Stigliani 2019). In regards to this, the
company encourages the people with an additional feature of ‘wishlist’ where the customers
can list the cities or the places that they desire to travel one after another.
Figure-1: Airbnb Website Wishlist
(Source- Elsbach and Stigliani 2019)
Using this method, the company was successful in encouraging individual travellers
with the desire to travel to places and get their desires filled by the dream destinations
(Mintrom and Luetjens 2016). This also added to the revenue generation of the company as
well as satisfied the customers with easy booking of their travelling by showing them high
quality pictures of such destinations that acted as a driving force to pull people out of their
homes and get business for the company, in turn.

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4. Business challenges and Design Thinking:
One of the primary challenges that Airbnb has been facing is lower generation of
revenue that consistently prevailed and had affected the company for a long time providing
them with no business (Carlgren, Rauth and Elmquist 2016). The customers who used to
access the website of the company for rental or accommodation purposes had stopped
looking through their website and booking flats or rental apartments. In regards to the service
design-thinking model, the company had first researched the actual problem that was existing
in depth. Following this, the company needed to design a prototype of a plan that shall be
followed by the organization to implementing the objectives of design thinking. For this, the
Airbnb team had travelled to New York and clicked pictures with professional cameras that
were of high quality. Following this, the pictures had been placed on the website as a part of
the third stage that defined the process of implementing the design thinking approach to
action (Brenner, Uebernickel and Abrell 2016). Lastly, the results had been observed when
such high quality pictures had started attracting more number of customers for renting
apartments as well as accommodations as well as increasing the revenue generation of the
organization.

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5. References:
Brenner, W., Uebernickel, F. and Abrell, T., 2016. Design thinking as mindset, process, and
toolbox. In Design thinking for innovation (pp. 3-21). Springer, Cham.
Brown, T. and Katz, B., 2019. Change by design: how design thinking transforms
organizations and inspires innovation (Vol. 20091). HarperBusiness.
Carlgren, L., Rauth, I. and Elmquist, M., 2016. Framing design thinking: The concept in idea
and enactment. Creativity and Innovation Management, 25(1), pp.38-57.
Elsbach, K.D. and Stigliani, I., 2019. The physical work environment and creativity: How
creative workspaces support and encourage design thinking. In Organizational Behaviour
and the Physical Environment (pp. 13-36). Routledge.
Huq, A. and Gilbert, D., 2017. All the world’sa stage: transforming entrepreneurship
education through design thinking. Education+ Training.
Kavousi, S., Miller, P.A. and Alexander, P.A., 2019. Modeling metacognition in design
thinking and design making. International Journal of Technology and Design Education,
pp.1-27.
Mintrom, M. and Luetjens, J., 2016. Design thinking in policymaking processes:
Opportunities and challenges. Australian Journal of Public Administration, 75(3), pp.391-
402.
Stickdorn, M., Hormess, M.E., Lawrence, A. and Schneider, J., 2018. This is service design
doing: Applying service design thinking in the real world. " O'Reilly Media, Inc.".